Verrica Pharmaceuticals Inc.

Good morning, ladies and gentlemen, and welcome to the Verica Pharmaceuticals' fourth quarter and year-end 2025 Corporate Update Conference Call. At this time, all participants are in a listen-only mode. After the speaker's remarks, there will be a question-and-answer session. As a reminder, this conference is being recorded. I will now turn the call over to our host, Kevin Gardner, of LifeSci Advisors. You may begin your conference.

Thank you, operator. Hello, everyone, and welcome to Verica Pharmaceutical's fourth quarter and year-end 2025 corporate update conference call. With me on the line this morning are Jason Rieger, President and Chief Executive Officer, Noah Rosenberg, Chief Medical Officer, John Kirby, Interim Chief Financial Officer, David Zawitz, Chief Operating Officer, and Chris Chapman, Chief Commercial Officer. As a reminder, during today's call, management will make forward-looking statements. These forward-looking statements are based on the company's current expectations and involve inherent risks and uncertainties. Verica's actual results and the timing of events could differ materially from those anticipated in such forward-looking statements. Please see Verica's SEC filings for important risk factors. Baraka cautions you not to place undue reliance on forward-looking statements and undertakes no duty or obligation to update any forward-looking statements as a result of new information, future events, or changes in expectations. In addition, during today's call, management will discuss certain non-GAAP financial measures. These non-GAAP financial measures are in addition to and not a substitute for or superior to measures of financial performance prepared in accordance with GAAP. There are a number of limitations related to the use of these non-GAAP financial measures compared to their closest GAAP equivalents. The earnings release that the company issued today includes GAAP to non-GAAP reconciliations for these measures and is also available on the investor relations section of Verica's website. I'll now turn the call over to Verica's president and CEO, Jason Rieger.

Thank you, Kevin. Good morning, everyone, and thank you for joining us on our fourth quarter and year-end 2025 corporate update call. Based on achieving multiple commercial, clinical, and financial initiatives, we believe 2025 will be remembered as the year Verica was able to fundamentally transform its business. setting a solid foundation for the future and supporting the delivery of long-term value creation for its shareholders. We started 2025 by stabilizing our commercial organization, ultimately more than doubling revenue from the core Wycant business for Moleskine, while dramatically cutting costs from the previous year. We also realized very meaningful advances in our efforts to expand our product portfolio with progress towards a second product, BP315, into a new indication for Y-CAMP, common warts, and into new markets, including Europe. Now, we are a completely different company than we were as we entered 2025, and I couldn't be more excited about the future that lies ahead. First and foremost, in 2025, we implemented a more optimized commercial strategy with the goal of establishing Y-CAMP as a new standard of care for the treatment of molluscum contagiosum. As a result, we were able to grow YCAMP's revenue by more than 130% compared to 2024, while at the same time reducing our selling general administrative expenses by over 40% from the same period. These results reflect the hard work and dedication of our team, disciplined cost management, and the progress we continue to make in building solid relationships with physicians, payers, and our distribution partners. We also made important progress in our pipeline, advancing both our common warts and basal cell carcinoma programs. We launched the global phase three program study for Y-CANTH for common warts with our Japanese development partner, Torrey Pharmaceutical, after negotiating an amended collaboration and license agreement with them. Under this arrangement, we received 18 million of milestone payments in the third quarter of 2025. and Tori will remit the first $40 million of program costs representing approximately 90% of the current budget. We will offset future milestones and royalty payments owed to us towards our share of the 50-50 split. We dosed the first patient in common warts program in December and look forward to initiating the second phase three study in the U.S. and Japan with Tori over the coming months. We believe our oncolytic peptide asset, VP315, represents one of the most promising opportunities in dermatology, and we substantially reduced the cost and time of a Phase III program in basal cell carcinoma by aligning with the FDA on a streamlined design study last year. We believe each of these advanced programs could represent significant value drivers for our company, and we are tremendously excited about these future potential products. Importantly, we have strengthened our financial position. In addition to the $18 million in non-dilutive funding from Tori, we executed a $50 million equity raise in November and the subsequent retirement of our outstanding debt. We also should note Tori's launch of YCAMP in Japan in February after receiving approval last year from PMDA. Barrett continues to work closely with Tori, now part of Shinogi, to support this commercial effort as we view Japan as the first of many additional countries where doctors will be able to treat their Moleskine patients with Y-CAMP. Together, these achievements demonstrate the potential value of our assets, one growing commercial program with the opportunity for future global market expansion, and two phase three development programs in large indications. These assets not only position us for a successful 2026, but also serve as the foundation for Verica's long-term strategy. I'll first provide an update on our Y-CAMP commercial business and then review the progress of our clinical stage programs in common warts and basal cell carcinoma. I'll then turn the call over to John, who will review our fourth quarter and full year 2025 financial performance. First, with respect to commercial update on Y-CAMP for molluscum. As a reminder, we have made purposeful investments in our co-pay assistance program to provide comfort to healthcare providers that their patients will be able to afford treatment with Y-CAMP. And this broad access to Y-CAMP has impacted gross to net estimates over the past year. In the fourth quarter of 2025, we grew Wycanth revenue to $3.7 million, up 3.2% from the third quarter, while we continue to maintain demand-driven purchases from our customers. Over the entire year, net Wycanth revenue grew over 130% relative to 2024. I am pleased to report that for the fourth consecutive quarter, Wycanth inventories remain at normalized levels with YCAMS applicator units shipped to distributors, continuing to closely track underlying dispensed applicator unit demand. In Q4, YCAMS dispensed applicator units grew to 13,654, a 58% increase from the fourth quarter of 2024. When comparing the fourth quarter to the third quarter of 2025, YCAMS dispensed applicator units decreased approximately 3%. In the first quarter of 2026, while January was likely impacted somewhat by significant winter weather across the East Coast, dispensed applicator units per selling day in February rebounded, reaching a record monthly high since launch. Overall, I've been very pleased by the significant traction driven by our commercial team so far in Q1. For the full year 2025, why can't dispensed applicator units total 51,196? versus 25,773 units for 2024, representing growth of 99% on a year-over-year basis. Our strong annual growth reflects the full impact of our new commercial strategy. In addition to expanding YCAMP's distribution through the pharmacy channel, we've continued to build strong relationships with dermatology, pediatric, and primary care offices, enabling us to steadily build YCAMP brand awareness and drive repeat utilization in high-volume practices. At the same time, we continue to build some solid relationships with many larger practices and hospital systems. We believe this strategy will help drive long-term utilization for Y-CAMP as these foundational HCP relationships will already be established if we are successful in expanding the label for Y-CAMP to common wards. In the fourth quarter, we continue to prioritize affordable access to Y-CAMP for patients. As such, we continue to pursue additional and expanded coverage and have achieved coverage wins in 2025 and 2026. Furthermore, as we previously announced, during the fourth quarter, we launched Y-CANTH-RX, our new non-dispensing pharmacy that gives prescribers a single place to write all Y-CANTH prescriptions. In addition to existing paths to access Y-CANTH, with Y-CANTH-RX now in place, YCAMP's prescriptions can be efficiently routed through dispensing pharmacy in our network that is contracted with the patient's insurance plan. Collectively, as these efforts come together, we hope to observe a positive impact on gross to net throughout 2026. Operationally, we made new additions to our commercial leadership and field teams in the fourth quarter and continued those efforts earlier this year, adding Chris Chapman to our team as our new chief commercial officer. The gradual expansion of our Salesforce, which began in the second half of last year, has also continued, and we still expect to reach a total of approximately 50 reps in 2026. During 2025, we made significant progress in our efforts to bring YCAMP to the European Union. In October, we announced that the Committee for Medicinal Products for Human Use, CHMP, of the European Medicines Agency, provided positive feedback that supports the filing of a marketing authorization application for Y-CAMP as a treatment for Maleska. More specifically, the CHMP concluded that, based on convincing efficacy data from the well-controlled Phase III studies successfully conducted in both the US and Japan, no further Phase III clinical studies would be needed to progress toward the filing for approval. Europe represents a large potential opportunity for YCAMP, with millions of Moleskine patients, and the feedback from CHMP provides us with added confidence to consider multiple strategic opportunities for realizing the full commercial potential of YCAMP in this large and underserved market. Our development teams continue to work through the required steps for submission in EU, which may occur within the next 12 months, and catalyze opportunities to secure commercialization partnerships in that region. I'll now provide an update on our common warts and basal cell clinical programs. For common warts, we previously announced that dosing of the first patient during December of 2025 in the global phase 3 trial evaluating Y-CANs for common warts, which represents an important clinical milestone for our label expansion strategy of Y-CANs. As a reminder, we observe clinically meaningful activity for the primary endpoint of complete clearance in the Phase 2 COVE-1 study. If successful in Phase 3 studies, we believe Y-CAMP has the potential to become the first therapy ever approved in both the United States and Japan for the treatment of common warts, a condition that impacts over 22 million people in the U.S. alone. As you will recall, we are running this Phase 3 program with our Japanese partner, Tori, now part of Shinogi, with whom we will split the cost 50-50 with Tory funding the first $40 million of clinical trial costs, representing approximately 90% of the current trial budget, and we will repay the portion out of our future milestones and royalties for Y-CANTH in Japan. Importantly, Baraka retains full commercial rights for all potential Y-CANTH indications outside of Japan. We believe securing an indication for common warts represents a substantial enhancement to the commercial and licensing opportunity for our company, and we expect to provide a more granular update on key timelines and milestones for the common work program later this year. I will now provide an update on our basal cell carcinoma program. We continue to make progress advancing our novel oncolytic peptide, BP315, which is being developed for the treatment of basal cell carcinoma. As a reminder, last November, we presented new VP315 data from our Phase II study at the Society for Immunotherapy of Cancer, 40th annual TITC presentation, which showed that VP315 induced a robust local immune response with both cell-mediated and humoral components, effectively shifting the tumor microenvironment from an immunosuppressive to an antitumor state. and additional data regarding the histologic assessment in non-injected lesions that suggests a potential abscopal-like effect. These data help explain why BP315 shrinks treated basal cell carcinomas in many patients as evidenced by a 97% objective response rate and an 86% reduction in overall tumor size. Since that presentation, there has been a growing interest in this program across a broad audience. We believe this reflects the high response rates observed in the study and the potential for VP315 to change the paradigm for basal cell, particularly for patients wishing to avoid or reduce their surgical burden and recovery. Our enthusiasm is further supported by the suggested potential for less scarring and improved compliance versus other therapeutic options such as surgery and topicals. as either a primary or neoadjuvant treatment for superficial and nodular tumors. We've also continued to evaluate the abscopal response in 14 observed but not treated lesions in the Phase II study and are excited to report that three out of the 14 lesions had complete histological clearance, 21% of the total number of lesions, and that there was a 67% overall reduction in tumor size across all 14 lesions. If this overall product profile could be demonstrated in pivotal Phase III testing, we believe BP315 has the potential to emerge as a non-surgical immunotherapy for treatment of basal cell carcinoma and other skin cancers. As noted on our third quarter earnings call, Verica has gained alignment with the FDA on an efficient Phase III study design for BP315. This includes two Phase III studies of approximately 100 subjects each in placebo-controlled studies for the primary endpoint of complete clearance at Week 14. Additional long-term follow-up studies will be deferred to post-approval commitments. We are actively assessing a variety of funding opportunities for this program and have initiated clinical and CMC activities to proactively prepare for the commencement of Phase III clinical trials. We expect to provide a more detailed plan on the program later this year. Before turning the call over to John to review our financials, I would first like to briefly touch on the impact of our recent equity raise in the fourth quarter. On November 24th, we announced a $50 million pipe, which enabled us to retire our outstanding debt while also extending our cash runway into 2027. I would like to thank our existing and new shareholders for their support, which has enabled us to continue execution of our YCAMP commercialization strategy, support the global phase three program for common warrants, and continue preparation activities for the Phase III clinical program for VP315, while we also explore non-dilutive development and commercialization opportunities for VP315 globally, as well as for YCAMP outside the United States and Japan. I'll now turn the call over to our Interim Chief Financial Officer, John Kirby, to review our fourth quarter and full year 2025 financials.